Produce is offered for sale at a grocery store on Oct 13, 2022 in Chicago, Illinois. (Photo: Agencies)
While sales are expected to reach a record high due to inflation, holiday spending in the United States is not expected to see the growth it did in the past two years.
Shoppers are also being more choosy in how they spend their diminished-valued dollars.
The National Retail Federation, or NRF, on Thursday forecast that holiday retail sales during November and December will grow between 6 and 8 percent over 2021 — to between an all-time high of $942.6 billion and $960.4 billion.
Last year, sales increased 13.5 percent over 2020 and totaled $889.3 billion, breaking previous records. In 2020, the increase was 9.3 percent, during a harrowing time when the COVID-19 pandemic and its attendant supply chain snags and production issues vexed holiday shoppers.
"While consumers are feeling the pressure of inflation and higher prices, and while there is continued stratification with consumer spending and behavior among households at different income levels, consumers remain resilient and continue to engage in commerce," NRF president and CEO Matthew Shay said.
While e-commerce will remain important, households are also expected to shift back to in-store shopping and a more traditional holiday shopping experience, the NRF suggested.
Persistent inflation in the 8-9 percent range has pummeled consumer spending power, which prompted the fourth straight 75-basis point rate increase from the Federal Reserve on Nov 2 and led many to cut down on discretionary purchases.
"As a result of inflation, 82 percent of shoppers say they intend to look for more deals and discounts, while 72 percent plan to look for less expensive alternatives," a Morning Consult survey said.
"I'm skipping the splurge this year," Kate Cheng, who owns a jewelry store in San Francisco, told The Wall Street Journal. Cheng said she usually buys a designer handbag or other luxury items during the holidays, but is holding back this year due to concerns about a potential recession.
Vered DeLeeuw said she used to buy most of her clothes at Bloomingdale's, but switched to Nordstrom Rack for discounts. "Bloomingdale's was my mother ship, but it is too expensive now," the food blogger told the Journal.
In its annual holiday spending survey, The Conference Board think tank found that US consumers intend to spend an average of $613 on holiday gifts this year, down from $648 last year. But they expect to spend more on related non-gift items this year — $393 compared to $374 last year, reflecting inflation and surging food prices.
